Quality education has an important role in shaping your future. However, quality education does not come cheap. Indian students who are driven with ambition and brighter career prospects are increasingly seeking to study at the top UK universities. There are a plethora of options when it comes to higher educational institutes abroad. Though getting the right education loans options for the UK remains a crucial aspect of selecting a course. This is where grants, scholarships, and student loans for education in the UK can play a significant role. On average the monthly cost of living for an international student in the UK can broadly be divided into 5 categories: Tuition fee, accommodation, food, transport and miscellaneous
To begin with, you first need to check if you are eligible to apply for an education loan for education in the UK or not. Below are the basic criteria that most of the Indian banks follow for checking the eligibility of the student loan applications for studying in the UK:
The applicant should be a citizen of India.
The applicant must have attained the age of 18 else his/her parents will have to take the loan.
A good academic background.
Admission letter from a recognised foreign university/institution/college.
Documents required for the UK education loan options
Before applying for an education loan for the UK, the applicant must be thorough with the documentation. Following documents are required to apply for a successful student loan application for the UK;
Duly filled application form
Passport size photographs of the applicant and the co-applicant.
Photo ID of the applicant and the co-applicant. It could be a PAN card, driving license, Voter ID card, Aadhar Card, or Passport.
Resident proof of the applicant and the co-applicant
Mark sheets and transcripts of the applicant
GRE, GMAT, TOEFL, IELTS certificate ( whichever is applicable)
Admission letter issued by the university or college.
Bank statement of last 6 months of applicant and co-applicant
In the case of collateral (immovable property), it could be flat, home, or non-agriculture land the following documents are required:
Property title deed
Building approved plan
NOC for a mortgage from a builder or society
Step by Step procedure of applying for an education loan from India for the UK
From application to loan disbursement, the entire student loan process is time-consuming, so it is always desirable to apply beforehand. Below is the step-wise guide, that will help you with the education loan for the UK from India.
Check whether the course you are going to study abroad is recognised by the banks.
Calculate how much loan would you need to fund your education in the UK.
Compare the student loan for the UK provided by different banks only and go for the one which tailors to your needs.
After finalising the bank and the loan amount, fill out the loan application form.
When the loan is approved, the bank will issue a loan document that includes various elements of the loan.
After signing the loan document, the bank will disburse the amount in instalments or as requested by the university.
Top banks that provide the best Education Loans options for the UK
HDFC Bank is one of the largest private banks offering education loan options for the UK. The maximum loan amount offered by the bank is up to INR 20 lakhs. If you want to avoid the last-minute rush, HDFC offers student loans even before the student has secured admission at the university.
State Bank of India
SBI offers a maximum amount of INR 30 lakhs as a student loan for education in the UK a loan margin of 15%. The Interest rate on the loan amount is up to 2% on base rate of SBI. Moreover, the loan repayment tenure can be 1 year to 15 years.
The bank offers a maximum of INR 20 lakhs as student loan options for the UK that cover different costs like tuition, accommodation, etc at competitive interest rates.
Punjab National Bank
The bank offers the base rate as the interest rate on the student loan amount taken for pursuing an education at the top 200 universities across the world.
Study Abroad Education Loan from NBFCs (Non-banking financial companies)
Apart from the nationalised and private banks, student loan options for the UK can also be taken from non-banking financial companies/institutions (NBFCs). Mortgagors need to provide collateral as security to the banks as the loan amount is generally more than INR 7.5 Lacs. Some of the known NBFCs options are:
Cedila: Cedila is part of the renowned HDFC bank and provides student loan options for the UK to Indian students. The loans are given at a competitive floating rate of interest and can be repaid within a period of 10 years.
Avanse: Part of the DHFL group, it is considered one of the most popular NBFC institutions in India. Education loans for the UK from Avanse can take care of the complete tuition fees and other expenses. Apart from this, the interest rates are floating and the dispensation fee can go up to 1 to 2 percent of the loan amount.
Global Student Loan Corporation (GSLC): The GSLC offers education loan options for international students to pursue their higher studies in the US without the requirement of any co-signer.
Points to remember before applying for an education loan for the UK in India
Cessation period: This is the time period during which the borrower need not make any repayment to the bank. This period varies from bank to bank and could last up to some time after completion of the course.
Loan Margin: Usually, banks do not provide the complete amount i.e. 100 %amount needed to fund the education. The majority of the public sector banks issues close to 90% of the total amount, the remaining 10% must be arranged by the applicant.
Effect of Exchange Rate: Always calculate the amount you will receive at the time of loan disbursement, as any change in the exchange rate can affect the disburse amount drastically.
FAQ’s related to education loans for studying in the UK
Q.1 What is Collateral?
Any property whether movable or immovable, which can be offered to a bank as a security for a loan is collateral. Most Indian banks demand collateral as security in order to reduce the risk involved in paying off the credit. Any type of liquid assets like bonds, FD, shares, or any immovable property like the house, any commercial property or just land can be classified as collateral. One important point to keep in mind is that agricultural land is not accepted as collateral.
Q.2 How much can you borrow against collateral?
If you want to take the loan against your immovable property as collateral, in that case, the bank’s representative will verify your property and prepare a report on whether it can be mortgaged or not. Then the representative will assess your property. Based on this report, the loan amount will be approved.
Q.3 For which type of courses, banks offer education loans for studying abroad?
Usually, banks and NBFCs prefer to give loans for undergraduate and postgraduate courses. Also, the majority of banks prefer to give education loans abroad for pursuing job oriented and professional courses because the repayment assurance increases.
To apply for a UK student visa, check the documents listed below for a seamless process.
letter of acceptance from the university you have been accepted to (CAS)
Proof of funds.
A valid passport and recent photographs.
Details of your university and accommodation.
Report of your health checkup
A valid passport. (keep a page blank for the visa)
Original mark sheets/transcripts
After collecting all the documents, Follow the steps below to apply for a UK student’s Visa.
Sign up and submit your visa application form online. It is advisable to check the online appointment calendar to book an appointment. After submission, you will get an email with an application number.
After receiving the email, Pay the fees, and collect the receipt.
Now appear for the visa interview as per the scheduled appointment and submit the necessary biometrics, photograph, application, and other documents.
You will get your tier 4 student visa in 6 weeks time.
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